The Cabinet Committee on Economic Affairs (CCEA), chaired by prime minister Narendra Modi, has approved a Dairy Processing and Infrastructure Development Fund (DIDF) at an outlay of Rs 10,881 crore for the period between 2017-18 and 2028-29.

Consequent to the Union Budget 2017-18 announcement, it will be set up as a corpus of Rs 8,004 crore with the National Bank for Agriculture and Rural Development (NABARD), which the Expenditure Finance Committee has given approval for.

Out of the financial outlay of Rs 10,881 crore for the project components of DIDF, Rs 8,004 crore shall be a loan from NABARD to the National Dairy Development Board (NDDB) and the National Dairy Development Cooperation (NCDC).

Rs 2,001 crore shall be the end borrowers’ contribution, Rs 12 crore would be NDDB and NCDC’s share and Rs 864 crore shall be contributed by the Department of Animal Husbandry, Dairying and Fisheries (DADF), Ministry of Agriculture and Farmers’ Welfare, towards interest subvention.

The allocation of Rs 864 crore for meeting interest subvention will be released to NABARD over a period of 12 years, covering the entire loan repayment period between 2017-18 and 2028-29.

The major activities of DIDFThe project will focus on building an efficient milk procurement system by setting up chilling infrastructure and installing electronic milk adulteration testing equipment, creating/modernising/expanding processing infrastructure and setting up manufacturing facilities for value-added products for milk unions and milk producer companies.

Management of DIDFThe project will be implemented by NDDB and NCDC directly through the end borrowers, such as milk unions (MUs), state dairy federations, multi-state milk cooperatives, milk producer companies and NDDB subsidiaries meeting the eligibility criteria under the project.

An implementation and monitoring cell (IMC) located at NDDB, Anand, Gujarat, will manage the implementation and monitoring of day-to-day project activities.

The end borrowers will get the loan at the rate of 6.5 per cent interest per annum. The period of repayment will be 10 years, with an initial moratorium of two years.

The respective state government will be the guarantor of loan repayment. Also for the project sanctioned, if the end user is unable to contribute its share, the state government will contribute the same.

Benefits from DIDFWith this investment, 95,00,000 farmers in about 50,000 villages would be benefited. An additional milk processing capacity of 126 lakh litre per day, milk drying capacity of 210 million tonne per day, milk chilling capacity of 140 lakh litre per day, installation of 28,000 bulk milk coolers (BMCs), along with electronic milk adulteration testing equipment, and a value-added product manufacturing capacity of 59.78 lakh litre per day of milk equivalent shall be created.

Initially, the department will start the project with 39 profit-making MUs of 12 states. Other milk cooperatives will become eligible on the basis of their net worth and profit levels, in subsequent years, to apply for loan under DIDF.

Direct employment opportunities for about 40,000 people will be created under the scheme through project activities like the expansion and modernisation of existing milk processing facilities, the setting up of new processing plants, establishment of manufacturing facilities for value-added products and the setting up of BMCs at the village level.

About two lakh indirect employment opportunities will be created on account of expansion of milk and milk product marketing operations from existing Tier-I, II and III to Tier-IV, V and VI cities/towns, etc.

This will lead to the deployment of more marketing staff by milk cooperatives, the appointment of distributors and the opening of additional milk booths/retail outlets in urban/rural locations.

With the increase in the milk procurement operations of the milk cooperatives, there would be generation of additional manpower employment for the supervision of increased milk procurement operations, the transportation of milk from villages to processing units, and increased input delivery services like artificial insemination (AI) services, veterinary services, etc.